Friday, February 20, 2009

Friday, February 20, 2009

California finally passed its latest terrible budget. Amidst an avalanche of cuts and regressive tax increases, it cut the University of California another $115 million and Cal State another $165 million.

The conventional wisdom is that it could have been worse. This view doesn't express budgetary reality. It expresses long-term budgetary trauma and the successful lowering of expectations into the basement.

UC had already suffered a mid-year cut of $65.5 million on top of the budget freeze of last year, had already enrolled 10,000 undergraduates for which the state paid zero (scroll down to p 4 in this Department of Finance document). The current-year cuts amount to 3.5% (on a presumptive state base of $3.24 billion). There is another $122 million in missing general funds for the 10,000 students that were not budgeted by the state (assuming about $10,000 in GF per student), so UC is about 7.3% below where it expected to be a year ago after the last bad January budget proposal from the governor. Given other necessary increased spending - "$213 million in unfunded mandatory costs" - UC is 14% below where the Regents budget had imagined the university to be way back in November 2007 . And that was just to stay even, not to expand or improve anything.

The budget also assumes a 10% fee hike. This will bring mandatory fees from about $7126 per year to around $7850, pushing overall fees (including variable campus fees) to around $9000. Fees have risen every year in this decade by 7-10% except, coincidentally, for the year when the governor was running for reelection.

An equally important question is where is this all heading? The short answer is down. Two reports (1 and 2) that I co-authored showed that the legislature and governor had already cut 40% of UC's General Fund since 1990 (in inflation-adjusted dollars), so we've rounded that corner and are heading for 50%. Operating units on my campus have been told to plan for 20% reductions in academic operations, just for this year. The reason is that most planners have decided that a) the recovery they were holding out for will never happen, and b) the decline will continue next year and after.

We are heading toward Scenarios 4 and 5 in the UC Senate reports linked above. The first was the "Futures Report," where Scenario 4 - the "Public Funding Freeze" - was first defined. In the second, the "Cuts Report," we mapped the freeze as modified by the "Schwarzenegger Revision." Here's how it looks when graphed.The new budget deal appears to put UC on the Scenario 5 pathway, in which it loses $1 billion below the Compact and $2 billion below where it would have been had the 2001 budget continued to increase at the rate of growth of state personal income.

Our reports showed that private fundraising and research funding cannot come close to filling in this shortfall. This leaves student fees as a revenue source. You can see in our reports where they wouldhave to go to offset the state cuts - towards about $15,000 per year by 2011-12 or so. The "Cuts Report" showed that were UC to fill in the entire state funding shortfall between 2007-08 and 2008-09 (over $400 million) with fees, however politically untenable and ethically and educationally undesirable this would be, fees would have to increase in one-year over 40%.What UC has done instead is combine lower fee increases with service cuts, always hoping against hope that they will be temporary. These service cuts have the political advantage of being largely invisible to students and the public. But they are eroding UC educational quality at an ever faster rate.

Making matters worse, UC's Office of the President went on record thanking the legislature and the governor for not cutting more.

“I am compelled to note that the proposed cuts to the university, while serious, do not appear to be disproportionate,” Mark G. Yudof, president of the University of California, wrote in a letter to its regents on Tuesday. “Indeed, I believe the Governor and the Legislature have helped to protect the university’s base budget from potentially even deeper cuts.”

Well yes, but only in the sense that before cutting off 1 of the university's fingers, the governor had threatened to cut off 3 or 4. He helped to protect all right, as in the phrase "protection racket."

I am completely mystified by the tradition in which the UC president always says how good the cuts are. It is simply bizarre this year, in the context of years of cuts, no recovery even to 2001 budget levels, yet another year of tuition hikes for students, and an enrollment freeze.

The presidential thank you signals that cuts don't really make much difference to us. The thank you says that future cuts will be ok too. The thank you says that UC is led by patsies who will take whatever they are given. The thank you this year ushers in further cuts in the next, and that is what's been happening for most of this decade.

While all other state workers lost 2 holidays and 2 working days of pay per month, California's prison system was not cut at all. Our prison system is famously overcrowded, dangerous, mobbed-up, racially segregated, and fatal to its inmates, particulary if they are being treated by the prison health-care system, which was so atrociously run that it was put in federal receivership.

We have an infuriating situation in which the budget is blocked every year for months at a time by minority Republican rule, and then this year by a lone nut with a fixation on an allocation for the state Comptroller's office furniture. "Success" - an actual budget - means that no bad deed goes unrewarded - incompetence and criminality in the prison system get a budgetary pat on the head, while disabled people, low-to-medium wage state clerks, and very successful professors and their college presidents do "more with less" and receive a fiscal kick in the pants. And then to make it completely absurd, the college president bows and says thank you.

Mark Yudof has lots of competition for the prize of "leader with the lowest expectations." The state of California is behind other big states in most things now, and not the cutting edge of much of anything, except decline. LA Times columnist George Skelton summed it up nicely during the similar budget fiasco one year ago. The question is whether the state's leaders are able to make any kind of a rational list of priorities, set any kind of intelligent goals, and take the population anywhere that it wants to go.

Posted by
Chris Newfield

Friday, February 13, 2009

Friday, February 13, 2009

The best tabulation of the final compromise stimulus for research is AAAS's. A good summary of the overall picture for higher ed can be found at Inside Higher Ed.

I will have to do some studying to find out how much of this is new money and how much already in the works.

Meanwhile, the State Higher Education Executive Officers (SHEEO) have come out with their important annual report on state expenditures on higher ed.

The background for the current downturn is as follows: "The report . . . indicates that per-student state appropriations were on the rise from 2006 to 2008, following four consecutive years of decline. Even with these gains, however, state-supported colleges are receiving less in constant dollars per student than they were in 2001 — a peak year in data that stretch back to 1983."

Since public higher ed is still underwater in relation to 2001, we're going to need a whole new stimulus to avoid another dive towards the bottom.

The most typical thing about the Sarkozy "reforms" are that they are no-money propositions. This is in spite of the fact that biggest problem with French universities is that on the Western scale they are poor.

The "reforms" are cost-free substitutes for better funding. Among other things, they

enhance the powers of each university president to reallocate the time and functions of teacher-researchers

increase the teaching hours of researchers

The theory seems to be that efficiency flows from having someone at the top giving orders. Command-and-control is a widely admitted failure in classrooms and laboratories, and it doesn't really work in the corporate world either. But it does allow conservative politicians to make moralizing statements about the shortcomings of everyone else, publicly flog their traditional enemies among scientists, teachers, and intellectuals, and save public money for more important things, like bank bailouts and tax cuts for the wealthy.

The same cheapness was also the case for Germany's "Elite 10" program for creating a German Ivy League. The idea came in the first place from the methodologically bad world rankings cranked out by Shanghai Jiao Tong University. The literal bait was utterly puny - 13.5 million Euros per year per winning campus through 2011. 37 universities turned themselves upside down to apply for money that would add about 5% to the research funds of an ordinary medium-sized campus in the United States. The real incentive was the status of the "German Ivy League" label. More accurately, the incentive was avoiding defeat and demotion to a lower university caste. The outcomes are always the same:

less pressure to spend real money, in this case to improve Germany's overall higher education system.

university personnel distracted from common advancement by competition

rankings that justify fewer resources for the newly-invented lower orders

less development for society overall.

I'll write a comparison soon on the French and American "how to," as in how to avoid spending actual money on higher education.

Posted by
Chris Newfield

Saturday, February 7, 2009

Saturday, February 7, 2009

Any illusion that higher ed has entered a new era of as a high government priority has been shattered by the Congressional negotiations over the stimulus package. The Senate has come to a "bipartisan compromise" that comes to about $820 billion before interest. It includes $116 for infrastructural improvements, $250 billion in tax cuts, and this:

Under the terms of the deal, Senate Democrats agreed to cut some $100 billion from their original proposal. Spending for the states and education took the biggest hit, compared with the House bill. State fiscal stabilization funding was cut back $40 billion, school construction dropped $16 billion, and a proposed $3.5 billion line for higher education construction was zeroed out.

Unfortunately, the states are where people actually live and spend their money, so it would make sense to send money there. In states like California, 100% of bond-dependent University of California construction has been put on hold, so some piece of $3.5 billion would have been exactly the stimulus we're supposed to get. They're our damn tax dollars, and we've already spent nearly that amount on bailing out banks that were blown up by genius executives who in many cases earn in one year what a beginning college teacher earns in a thousand.

In California, Pell Grant students were already facing freezes and rollbacks in Gov. Arnold Schwarzenegger's proposed budget. The new round has Pell Grant funds being paid as I.O.U.s, and UC and Cal State having to swallow the cost by not charging Pell Grant students the missing amount until it's made up. And this is in fact a federal program.

Completing the good news from yesterday, the National Science Foundation reported that the federal R&D funding in FY 2008 is nearly 5% below that of FY 2007 (after inflation), and down over 7% from FY 2005. Basic research fell an incredible 25% percent.

This is bad for knowledge and bad for university products. The only good news is that it may be another nail in the coffin of the failed funding policies of public higher education leaders that I analyzed in the Chronicle of Higher Ed last year and have posted here. This defeat might start forcing more public universities finally to admit how dependent they are on public money, and fight to get it back. The events this week show just how badly off the game they are.